Chinese Media Accuse Starbucks of Inflating Prices

If you balk at the price of your morning Starbucks drink, remember that you don't have it as bad as those drinking that same beverage in China. According to CNN, the Chinese media has accused the coffee giant of making consumers pay more for their lattes, moccachinos, and americanos than the majority of markets around the globe.

State-backed China Central Television (CCTV) and the China Daily newspaper reported that the cost of a medium-size latte at Starbucks in Beijing costs 27 yuan ($4.42), while that same latte costs just $4 in London and $3.20 in Chicago. It's not just the coffee that the media is accusing Starbucks of price gouging. The reports allege that a coffee mug at Starbucks in the U.S. goes for between $10-14, while in China, where it is produced, that same mug can cost as much as $18.

China is one of Starbucks' biggest markets; in 2014 it will be second only to the U.S. According to a statement the company released to Reuters, its pricing is based on a number of variables, including "local business costs such as labor and commodity costs, infrastructure investment, currency and real estate." In an interview on CCTV, Wang Zhendong, director of the Coffee Association of Shanghai, explained that the coffee giant has been able to enjoy their inflated prices due to "blind faith of local consumers in Starbucks and other Western brands." However, Starbucks defends its pricing, telling Reuters, "Each Starbucks market is unique and has different operating costs, so it would be inaccurate to draw conclusions about one market based on the prices in a different market."

Starbucks is not the first foreign company to come under attack in the Chinese media. Recently Apple was scrutinized and accused of using refurbished parts to fix their products in China, then limit warrantees to one year, according to CNN.